in the united states district court for the district …...youtube, llc, a delaware limited...

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

FEDERAL TRADE COMMISSION,

and

PEOPLE OF THE STATE OF NEW YORK, by LETITIA JAMES, Attorney General of the State of New York,

Plaintiffs,

vs.

GOOGLE LLC, a Delaware limited liability company,

and

YOUTUBE, LLC, a Delaware limited liability company,

Defendants.

Case No.: 1:19-cv-02642

STIPULATED ORDER FOR PERMANENT INJUNCTION AND CIVIL PENALTY JUDGMENT

Plaintiffs, the Federal Trade Commission (“FTC” or “Commission”) and The People of

the State of New York (“State of New York”) (collectively, “Plaintiffs”) filed their Complaint

for Permanent Injunction, Civil Penalties, and Other Relief (“Complaint”) in this matter,

pursuant to Sections 13(b) and 16(a)(1) of the Federal Trade Commission Act (“FTC Act”), 15

U.S.C. §§ 53(b) and 56(a)(1), the Children’s Online Privacy Protection Act (“COPPA”), 15

U.S.C. §§ 6502(c), 6504(a)(1), and 6505(d), and the Commission’s Children’s Online Privacy

Protection Rule (“Rule” or “COPPA Rule”), 16 C.F.R. Part 312. Defendants have waived

service of the summons and the Complaint. Plaintiffs and Defendants stipulate to the entry of

this Stipulated Order for Permanent Injunction and Civil Penalty Judgment (“Order”) to resolve

all matters in dispute in this action between them.

THEREFORE, IT IS ORDERED as follows:

Case 1:19-cv-02642 Document 2-1 Filed 09/04/19 of 31

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FINDINGS

1. This Court has jurisdiction over this matter.

2. The Complaint charges that Defendants violated the COPPA Rule and Section 5

of the FTC Act, 15 U.S.C. § 45, by failing to post a privacy policy on their online service

providing clear, understandable, and complete notice of their information practices with respect

to the Collection of Personal Information from Children, failing to provide direct notice to

Parents of such information practices, and failing to Obtain Verifiable Parental Consent prior to

Collecting, using, or Disclosing Personal Information from Children.

3. Defendants neither admit nor deny any of the allegations in the Complaint, except

as specifically stated in this Order. Only for purposes of this action, Defendants admit the facts

necessary to establish jurisdiction.

4. Defendants waive any claim that they may have under the Equal Access to Justice

Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order,

and agree to bear their own costs and attorney fees.

5. Defendants and Plaintiffs waive all rights to appeal or otherwise challenge or

contest the validity of this Order.

DEFINITIONS

For the purpose of this Order, the following definitions apply:

A. “Channel Owner” means individuals or entities who upload videos onto the

YouTube Service.

B. “Child” or “Children” means an individual or individuals under the age of 13.


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C. “Clear and Conspicuous” means that a required disclosure is difficult to miss

(i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of the

following ways:

1. In any communication that is solely visual or solely audible, the disclosure

must be made through the same means through which the communication is

presented. In any communication made through both visual and audible means,

such as a television advertisement, the disclosure must be presented

simultaneously in both the visual and audible portions of the communication even

if the representation requiring the disclosure is made in only one means.

2. A visual disclosure, by its size, contrast, location, the length of time it

appears, and other characteristics, must stand out from any accompanying text or

other visual elements so that it is easily noticed, read, and understood.

3. An audible disclosure, including by telephone or streaming video, must be

delivered in a volume, speed, and cadence sufficient for ordinary consumers to

easily hear and understand it.

4. In any communication using an interactive electronic medium, such as the

Internet or software, the disclosure must be unavoidable.

5. The disclosure must use diction and syntax understandable to ordinary

consumers and must appear in each language in which the representation that

requires the disclosure appears.

6. The disclosure must comply with these requirements in each medium

through which it is received, including all electronic devices and face-to-face

communications.


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7. The disclosure must not be contradicted or mitigated by, or inconsistent

with, anything else in the communication.

8. When the representation or sales practice targets a specific audience, such

as Children, the elderly, or the terminally ill, “ordinary consumers” includes

reasonable members of that group.

D. “Collects” or “Collection” means the gathering of any Personal Information from

a Child by any means, including but not limited to:

1. Requesting, prompting, or encouraging a Child to submit Personal

Information online;

2. Enabling a Child to make Personal Information publicly available in

identifiable form. An Operator shall not be considered to have Collected Personal

Information if it takes reasonable measures to Delete all or virtually all Personal

Information from a Child’s postings before they are made public and also to

Delete such Personal Information from its records; or

3. Passive tracking of a Child online.

E. “Compliance Date” means four months after entry of this Order.

F. “Content” means any video or channel page found on the YouTube Service.

G. “Defendants” means Google LLC, a Delaware limited liability company, and

YouTube, LLC, a Delaware limited liability company, and their successors and assigns.

H. “Delete” means to remove Personal Information such that it is not maintained in

retrievable form and cannot be retrieved in the normal course of business.

I. “Disclose” or “Disclosure” means, with respect to Personal Information:


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1. The Release of Personal Information Collected by an Operator from a

Child in identifiable form for any purpose, except where an Operator provides

such information to a Person who provides Support for the Internal Operations of

the Website or Online Service; and

2. Making Personal Information Collected by an Operator from a Child

publicly available in identifiable form by any means, including but not limited to

a public posting through the Internet, or through a personal home page or screen

posted on a website or online service; a pen pal service; an electronic mail

service; a message board; or a chat room.

J. “Internet” means collectively the myriad of computer and telecommunications

facilities, including equipment and operating software, which comprise the interconnected world-

wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or

any predecessor or successor protocols to such protocol, to communicate information of all kinds

by wire, radio, or other methods of transmission.

K. “Obtaining Verifiable Parental Consent” means making any reasonable effort

(taking into consideration available technology) to ensure that before Personal Information is

Collected from a Child, a Parent of the Child:

1. Receives notice of the Operator’s Personal Information Collection, use,

and Disclosure practices; and

2. Authorizes any Collection, use, and/or Disclosure of the Personal

Information, using a method reasonably calculated, in light of available

technology, to ensure that the Person providing consent is the Child’s Parent.


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L. “Online Contact Information” means an email address or any other substantially

similar identifier that permits direct contact with a Person online, including but not limited to, an

instant messaging user identifier, a voice over internet protocol (VOIP) identifier, or a video chat

user identifier.

M. “Operator” means any Person who operates a website located on the Internet or

an online service and who Collects or maintains Personal Information from or about the users of

or visitors to such website or online service, or on whose behalf such information is Collected or

maintained, or offers products or services for sale through that website or online service, where

such website or online service is operated for commercial purposes involving commerce among

the several States or with one or more foreign nations; in any territory of the United States or in

the District of Columbia, or between any such territory and another such territory or any State or

foreign nation; or between the District of Columbia and any State, territory, or foreign nation.

This definition does not include any nonprofit entity that would otherwise be exempt from

coverage under Section 5 of the Federal Trade Commission Act (15 U.S.C. § 45). Personal

Information is Collected or maintained on behalf of an Operator when:

1. It is Collected or maintained by an agent or service provider of the

Operator; or

2. The Operator benefits by allowing another Person to Collect Personal

Information directly from users of such website or online service.

N. “Parent” includes a legal guardian.

O. “Person” means any individual, partnership, corporation, trust, estate,

cooperative, association, or other entity.


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P. “Personal Information” means individually identifiable information about an

individual Collected online, including:

1. A first and last name;

2. A home or other physical address including street name and name of a city

or town;

3. Online Contact Information;

4. A screen or user name where it functions in the same manner as Online

Contact Information;

5. A telephone number;

6. A Social Security number;

7. A persistent identifier that can be used to recognize a user over time and

across different websites or online services, where such persistent identifier is

used for functions other than or in addition to Support for the Internal Operations

of the Website or Online Service. Such persistent identifier includes, but is not

limited to, a customer number held in a cookie, an Internet Protocol (IP) address,

a processor or device serial number, or unique device identifier;

8. A photograph, video, or audio file where such file contains a Child’s

image or voice;

9. Geolocation information sufficient to identify street name and name of a

city or town; or

10. Information concerning the Child or the Parents of that Child that the

Operator Collects online from the Child and combines with an identifier described

in this definition.


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Q. “Release of Personal Information” means the sharing, selling, renting, or

transfer of Personal Information to any Third Party.

R. “Support for the Internal Operations of the Website or Online Service”

means

1. Those activities necessary to:

a) Maintain or analyze the functioning of the website or online

service;

b) Perform network communications;

c) Authenticate users of, or personalize the content on, the

website or online service;

d) Serve contextual advertising on the website or online service or

cap the frequency of advertising;

e) Protect the security or integrity of the user, website, or online

service;

f) Ensure legal or regulatory compliance; or

g) Fulfill a request of a Child as permitted by Section 312.5(c)(3) and

(4) of the COPPA Rule (attached as Appendix A);

2. So long as the information Collected for these activities listed in 1(a) – (g)

is not used or Disclosed to contact a specific individual, including through

behavioral advertising, to amass a profile on a specific individual, or for any other

purpose.

S. “Third Party” means any Person who is not:


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1. An Operator with respect to the Collection or maintenance of Personal

Information on the website or online service; or

2. A Person who provides Support for the Internal Operations of the Website

or Online Service and who does not use or Disclose information protected under

the COPPA Rule (attached as Appendix A).

T. “Website or Online Service Directed to Children” means a commercial website

or online service, or portion thereof, that is targeted to Children.

1. In determining whether a website or online service, or a portion thereof, is

directed to Children, the Commission will consider its subject matter, visual

content, use of animated characters or child-oriented activities and incentives,

music or other audio content, age of models, presence of child celebrities or

celebrities who appeal to Children, language or other characteristics of the

website or online service, as well as whether advertising promoting or appearing

on the website or online service is directed to Children. The Commission will

also consider competent and reliable empirical evidence regarding audience

composition, and evidence regarding the intended audience.

2. A website or online service shall be deemed directed to Children when it

has actual knowledge that it is Collecting Personal Information directly from

users of another Website or Online Service Directed to Children.

3. A website or online service that is directed to Children under the criteria

set forth in paragraph (1) of this definition, but that does not target Children as its

primary audience, shall not be deemed directed to Children if it:


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a) Does not Collect Personal Information from any visitor prior to

Collecting age information; and

b) Prevents the Collection, use, or Disclosure of Personal Information

from visitors who identify themselves as under age 13 without first

complying with the notice and parental consent provisions of the

COPPA Rule (attached as Appendix A).

4. A website or online service shall not be deemed directed to Children

solely because it refers or links to a commercial Website or Online Service

Directed to Children by using information location tools, including a directory,

index, reference, pointer, or hypertext link.

U. “YouTube Service” means the general audience YouTube user-generated video-

sharing platform(s), currently at www.youtube.com and on YouTube mobile application(s), on

which, among other things, consumers can view videos or upload videos to share.

ORDER

I. INJUNCTION CONCERNING DESIGNATING CONTENT ON THE YOUTUBE

SERVICE AS DIRECTED TO CHILDREN

IT IS ORDERED that, no later than the Compliance Date, Defendants and Defendants’

officers, agents, employees, and attorneys, and all other Persons in active concert or participation

with any of them, who receive actual notice of this Order, whether acting directly or indirectly,

in connection with operating the YouTube Service, are permanently restrained and enjoined

from:

A. Failing to develop, implement, and maintain a system for Channel Owners to

designate whether their Content on the YouTube Service is directed to Children. Such system


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shall include a Clear and Conspicuous notice that Content made available on the YouTube

Service that is directed to Children may be subject to the Children’s Online Privacy Protection

Rule, 16 C.F.R. Part 312 (attached as Appendix A) and that Channel Owners are obligated to

designate such Content as directed to Children; and

B. Failing to provide annual training regarding complying with the Children’s Online

Privacy Protection Rule, 16 C.F.R. Part 312 (attached as Appendix A), for each Person

responsible for managing Defendants’ relationships with Channel Owners on the YouTube

Service.

II. INJUNCTION CONCERNING COLLECTION OF PERSONAL INFORMATION

FROM CHILDREN

IT IS ORDERED that, no later than the Compliance Date, Defendants and Defendants’

officers, agents, employees, and attorneys, and all other persons in active concert or participation

with any of them, who receive actual notice of this Order, whether acting directly or indirectly,

in connection with operating a Website or Online Service Directed to Children on the YouTube

Service are hereby permanently restrained and enjoined from:

A. Failing to make reasonable efforts, taking into account available technology, to

ensure that a Parent of a Child receives direct notice of Defendants’ practices with regard to the

Collection, use, or Disclosure of Personal Information from Children, including notice of any

material change in the Collection, use, or Disclosure practices to which the Parent has

previously consented, unless the Children’s Online Privacy Protection Rule, 16 C.F.R. Part 312

(attached as Appendix A), provides an exception to providing such notice;

B. Failing to post a prominent and clearly labeled link to an online notice of its

information practices with regard to Children on the home or landing page or screen of its


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website or online service, and at each area of the website or online service where Personal

Information is Collected from Children, unless the Children’s Online Privacy Protection Rule, 16

C.F.R. Part 312 (attached as Appendix A), provides an exception to providing such notice;

C. Failing to Obtain Verifiable Parental Consent before any Collection, use, or

Disclosure of Personal Information from Children, including consent to any material change in

the Collection, use, or Disclosure practices to which the Parent has previously consented, unless

the Children’s Online Privacy Protection Rule, 16 C.F.R. Part 312 (attached as Appendix A),

provides an exception to Obtaining Verifiable Parental Consent; and

D. Violating the Children’s Online Privacy Protection Rule, 16 C.F.R. Part 312

(attached as Appendix A).

III. INJUNCTION CONCERNING USE OF PREVIOUSLY

COLLECTED PERSONAL INFORMATION

IT IS FURTHER ORDERED that Defendants, Defendants’ officers, agents, employees,

and attorneys, and all other Persons in active concert or participation with any of them, who

receive actual notice of this Order, are ordered to refrain, within ninety (90) days of the

Compliance Date, from Disclosing, using, or benefitting from Personal Information previously

Collected from users of Content that is designated as directed to Children by a Channel Owner

under the system required under Section I.A. above, as long as such designation occurs within

sixty (60) days of the Compliance Date. Provided, however, that such Personal Information may

be Disclosed to the extent requested by a government agency or required by law, regulation, or

court order.


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IV. CIVIL PENALTY AND OTHER MONETARY RELIEF

IT IS FURTHER ORDERED that:

A. Judgment in the amount of one hundred and thirty six million dollars

($136,000,000) is entered in favor of Plaintiff FTC against Defendants, jointly and severally, as a

civil penalty.

B. Defendants are ordered to pay to Plaintiff FTC one hundred thirty six million

dollars ($136,000,000), which, as Defendants stipulate, their undersigned counsel holds in

escrow for no purpose other than payment to the Commission. Such payment must be made

within thirty (30) days of entry of this Order by electronic fund transfer in accordance with

instructions previously provided by a representative of the Commission.

C. Judgment in the amount of thirty four million dollars ($34,000,000) is entered in

favor of Plaintiff State of New York against Defendants, jointly and severally, as damages,

restitution, or other compensation to its residents.

D. Defendants are ordered to pay to Plaintiff State of New York, by making payment

to State of New York Department of Law, thirty four million dollars ($34,000,000). Such

payment must be made within thirty (30) days of entry of this Order by wire transfer in

accordance with instructions provided by a representative of Plaintiff State of New York.

V. ADDITIONAL MONETARY PROVISIONS

IT IS FURTHER ORDERED that:

A. Defendants relinquish dominion and all legal and equitable right, title, and interest

in all assets transferred pursuant to this Order and may not seek the return of any assets.


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B. The facts alleged in the Complaint will be taken as true, without further proof, in

any subsequent civil litigation by or on behalf of the Commission or the State of New York in a

proceeding to enforce its rights to any payment or monetary judgment pursuant to this Order.

C. The facts alleged in the Complaint establish all elements necessary to sustain an

action by the Commission or the State of New York pursuant to Section 523(a)(2)(A) of the

Bankruptcy Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect

for such purposes.

D. Defendants acknowledge that their Taxpayer Identification Numbers, which

Defendants must submit to the Commission, may be used for collecting and reporting on any

delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.

VI. ORDER ACKNOWLEDGMENTS

IT IS FURTHER ORDERED that Defendants obtain acknowledgments of receipt of this

Order:

A. Each Defendant, within seven (7) days of entry of this Order, must submit to the

Commission and the State of New York an acknowledgment of receipt of this Order sworn under

penalty of perjury.

B. For five (5) years after entry of this Order, each Defendant must deliver a copy of

this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all

employees, agents, and representatives who have supervisory responsibilities relating to the

subject matter of Sections I and II of this Order; and (3) any business entity resulting from any

change in structure as set forth in the Section titled Compliance Reporting. Delivery must occur

within seven (7) days of entry of this Order for current personnel. For all others, delivery must

occur before they assume their responsibilities.


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C. From each individual or entity to which a Defendant delivered a copy of this

Order, that Defendant must obtain, within thirty (30) days, a signed and dated acknowledgment

of receipt of this Order.

VII. COMPLIANCE REPORTING

IT IS FURTHER ORDERED that Defendants make timely submissions to the

Commission and the State of New York:

A. One year after the Compliance Date, each Defendant must submit a compliance

report, sworn under penalty of perjury. In such report, each Defendant must:

1. Identify the primary physical, postal, and email address and telephone

number, as designated points of contact, which representatives of the Commission

and the State of New York may use to communicate with that Defendant;

2. Identify all of Defendant’s businesses involved in operating the YouTube

Service or in Collecting, using, or Disclosing Personal Information from Children

on or from the YouTube Service by all of their names, telephone numbers, and

physical, postal, email, and Internet addresses;

3. Describe the activities of each such business directly involved with

operating the YouTube Service, including the goods and services offered and the

means of advertising, marketing, and sales;

4. Describe in detail whether and how Defendants are in compliance with

each Section of this Order;

5. Provide a copy of each materially different version of any privacy notice

posted on or otherwise applicable to the YouTube Service or sent to users of the

YouTube Service;


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6. Describe in detail the methods used, if any, to track Child users of the

YouTube Service (including methods used for passive tracking and means for

users to control or opt out of tracking), and the measures taken to avoid tracking

Children;

7. Describe in detail the methods used to Obtain Verifiable Parental Consent

prior to any Collection, use, and/or Disclosure of Personal Information from

Children through the YouTube Service;

8. Describe in detail the means provided for Parents to review the Personal

Information Collected from their Children through the YouTube Service and to

refuse to permit its further use or maintenance; and

9. Provide a copy of each Order Acknowledgment obtained pursuant to this

Order, unless previously submitted to the Commission.

B. For ten (10) years after entry of this Order, each Defendant must submit a

compliance notice, sworn under penalty of perjury, within fourteen (14) days of any change in:

(1) any designated point of contact; or (2) the structure of that Defendant or any entity that

Defendant has any ownership interest in or controls directly or indirectly that may affect

compliance obligations arising under this Order, including: creation, merger, sale, or dissolution

of the entity or any subsidiary, parent, or affiliate that engages in any acts or practices subject to

this Order.

C. Each Defendant must submit to the Commission and the State of New York

notice of the filing of any bankruptcy petition, insolvency proceeding, or similar proceeding by

or against such Defendant within fourteen (14) days of its filing.


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D. Any submission to the Commission and the State of New York required by this

Order to be sworn under penalty of perjury must be true and accurate and comply with 28 U.S.C.

§ 1746, such as by concluding: “I declare under penalty of perjury under the laws of the United

States of America that the foregoing is true and correct. Executed on: _____” and supplying the

date, signatory’s full name, title (if applicable), and signature.

E. Unless otherwise directed by a Commission representative in writing, all

submissions to the Commission pursuant to this Order must be emailed to [email protected] or

sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement,

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, DC 20580. The subject line must begin: FTC v. Google LLC and YouTube, LLC,

FTC File No. 1723083.

F. Unless otherwise directed by a State of New York representative in writing, all

submissions to the State of New York pursuant to this Order must be emailed to

[email protected] and sent by overnight courier (not the U.S. Postal Service) to: Bureau Chief,

Bureau of Internet and Technology, New York State Attorney General’s Office, 28 Liberty

Street, New York, New York 10005. The subject line must begin: FTC v. Google LLC and

YouTube, LLC, FTC File No. 1723083.

VIII. RECORDKEEPING

IT IS FURTHER ORDERED that Defendants must create certain records for ten (10)

years after entry of the Order, and retain each such record for five (5) years. Specifically, each

Defendant in connection with operating the YouTube Service must create and retain the

following records:

A. Accounting records showing the revenues of all goods and services sold;


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B. Personnel records showing, for each Person providing services, whether as an

employee or otherwise, that Person’s: name; addresses; telephone numbers; job title or position;

dates of service; and (if applicable) the reason for termination;

C. All records necessary to demonstrate full compliance with each provision of this

Order, including all submissions to the Commission and the State of New York;

D. Records of all consumer complaints relating to the unauthorized Collection, use or

Disclosure of Personal Information of Children interacting with the YouTube Service, and any

response;

E. A copy of each materially different form, page, or screen created, maintained, or

otherwise provided by each Defendant through which Personal Information of Children is

Collected through the YouTube Service, and a copy of each materially different document

containing any representation regarding Collection, use, and Disclosure practices pertaining to

Personal Information from Children Collected through the YouTube Service. Each webpage

copy shall be accompanied by the URL of the webpage where the material was posted online.

Electronic copies shall include all text and graphics files, audio scripts, and other computer files

used in presenting information on the Internet; and

F. A copy of each unique advertisement, other marketing material, telemarketing

script, or other representation related to the Collection of Personal Information of Children that is

made in connection with promoting or offering for sale the YouTube Service.

IX. COMPLIANCE MONITORING

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants’ compliance

with this Order:


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A. Within fourteen (14) days of receipt of a written request from a representative of

the Commission or the State of New York, each Defendant must: submit additional compliance

reports or other requested information, which must be sworn under penalty of perjury; appear for

depositions; and produce documents for inspection and copying. The Commission and the State

of New York are also authorized to obtain discovery, without further leave of court, using any of

the procedures prescribed by Federal Rules of Civil Procedure 29, 30 (including telephonic

depositions), 31, 33, 34, 36, 45, and 69.

B. For matters concerning this Order, the Commission and the State of New York

are authorized to communicate directly with each Defendant. Each Defendant must permit

representatives of the Commission and the State of New York to interview any employee or

other Person affiliated with Defendant who has agreed to such an interview. The Person

interviewed may have counsel present.

C. The Commission and the State of New York may use all other lawful means,

including posing, through its representatives as consumers, suppliers, or other individuals or

entities, to Defendants or any individual or entity affiliated with Defendants, without the

necessity of identification or prior notice. Nothing in this Order limits the Commission’s lawful

use of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-

1.


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X. RETENTION OF JURISDICTION

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for purposes of

construction, modification, and enforcement of this Order.

SO ORDERED this day of , 2019.

_______________________________ UNITED STATES DISTRICT JUDGE


SO STIPULATED AND AGREED:

FOR PLAINTIFFS

FEDERAL TRADE COMMISSION:

v/r/�a. 1ll111Ja1 I tu; MANEESHA MITHAL I Associate Director Division of Privacy and Identity Protection

MARK EICHORN I

Assistant Director Divisi 'ri?>f� ivacy and Identity Protection

KIDS TIN KRAUSE COHEN (D.C. Bar No. 485946) Division of Privacy and Identity Protection Federal Trade Commission 600 Pennsylvania Ave., NW Washington, DC 20580 (202) 326-2276 (voice)(202) 326-3062 (fax)Email: [email protected]

�RL� P 7:JFlt'�GEE (D.C. Bar No. 444750) Division of Privacy and Identity Protection Federal Trade Commission 600 Pennsylvania Avenue, NW Washington, DC 20580 (202) 326-3538 (voice)(202) 326-3062 (fax)Email: [email protected]

l f di (W.,f t, liXA(._ I jJJ:_ TIFF¼NY·GEORGE 61.V. Bar No. 4023248) Division of Privacy and Identity Protection Federal Trade Commission 600 Pennsylvania Avenue, NW Washington, DC 20580 (202) 326-3040 (voice)(202) 326-3062 (fax)Email: [email protected]

21


~ --


FOR THE PEOPLE OF THE STATE OF NEW YORK:

LETITIA JAMES Attorney General of the State ofNew York

By ~ aL CLA ~RWELL (New York Bar No. 2848323) Deputy Bureau Chief JORDAN S. ADLER (New York Bar No. 4605556) Assistant Attorney General Bureau of Internet and Technology Office of the New York State Attorney General 28 Liberty St. New York, NY 10005 (212) 416-8433 (voice) (212) 416-8369 (fax) Email: [email protected] Email: [email protected]

22

��

��

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FOR DEFENDANTS:

C L"":

Libby J. Weingarten, Esq. Wilson Sonsini Goodrich & Rosati 1700 K Street, NW 5th Floor Washington, DC 20006 (202) 973-8800 (202) 973-8899 col [email protected] I wein garten@w gr.com

Date:

COUNSEL for GOOGLE LLC and YOUTUBE, LLC

DEFENDANT: GOOGLELLC

Date:

Name: Kent Walker

----

----

Title: Senior Vice President, Global Affairs & Chief Legal Officer

DEFENDANT: YOUTUBE,LLC By: Google LLC, its Managing Member

lfJM!L Date: ----Name: Kent Walker

Title: Senior Vice President, Global Affairs & Chief Legal Officer

23

APPENDIX A


4008 Federal Register / Vol. 78, No. 12 / Thursday, January 17, 2013 / Rules and Regulations

List of Subjects in 16 CFR Part 312

Children, Communications, Consumer protection, Electronic mail, Email, Internet, Online service, Privacy, Record retention, Safety, science and technology, Trade practices, Web site, Youth.

■ Accordingly, for the reasons stated above, the Federal Trade Commissionrevises part 312 of Title 16 of the Codeof Federal Regulations to read asfollows:

PART 312—CHILDREN’S ONLINE PRIVACY PROTECTION RULE

Sec. 312.1 Scope of regulations in this part. 312.2 Definitions. 312.3 Regulation of unfair or deceptive acts

or practices in connection with the collection, use, and/or disclosure of personal information from and about children on the Internet.

312.4 Notice. 312.5 Parental consent. 312.6 Right of parent to review personal

information provided by a child. 312.7 Prohibition against conditioning a

child’s participation on collection of personal information.

Appendix A



312.8 Confidentiality, security, and integrity of personal information collected from children.

312.9 Enforcement. 312.10 Data retention and deletion

requirements. 312.11 Safe harbor programs. 312.12 Voluntary Commission Approval

Processes. 312.13 Severability.

Authority: 15 U.S.C. 6501–6508.

§ 312.1 Scope of regulations in this part.This part implements the Children’s

Online Privacy Protection Act of 1998, (15 U.S.C. 6501, et seq.,) which prohibits unfair or deceptive acts or practices in connection with the collection, use, and/or disclosure of personal information from and about children on the Internet.

§ 312.2 Definitions.Child means an individual under the

age of 13. Collects or collection means the

gathering of any personal information from a child by any means, including but not limited to:

(1) Requesting, prompting, orencouraging a child to submit personal information online;

(2) Enabling a child to make personalinformation publicly available in identifiable form. An operator shall not be considered to have collected personal information under this paragraph if it takes reasonable measures to delete all or virtually all personal information from a child’s postings before they are made public and also to delete such information from its records; or

(3) Passive tracking of a child online.Commission means the Federal Trade

Commission. Delete means to remove personal

information such that it is not maintained in retrievable form and cannot be retrieved in the normal course of business.

Disclose or disclosure means, with respect to personal information:

(1) The release of personalinformation collected by an operator from a child in identifiable form for any purpose, except where an operator provides such information to a person who provides support for the internal operations of the Web site or online service; and

(2) Making personal informationcollected by an operator from a child publicly available in identifiable form by any means, including but not limited to a public posting through the Internet, or through a personal home page or screen posted on a Web site or online service; a pen pal service; an electronic mail service; a message board; or a chat room.

Federal agency means an agency, as that term is defined in Section 551(1) of title 5, United States Code.

Internet means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire, radio, or other methods of transmission.

Obtaining verifiable consent means making any reasonable effort (taking into consideration available technology) to ensure that before personal information is collected from a child, a parent of the child:

(1) Receives notice of the operator’spersonal information collection, use, and disclosure practices; and

(2) Authorizes any collection, use,and/or disclosure of the personal information.

Online contact information means an email address or any other substantially similar identifier that permits direct contact with a person online, including but not limited to, an instant messaging user identifier, a voice over internet protocol (VOIP) identifier, or a video chat user identifier.

Operator means any person who operates a Web site located on the Internet or an online service and who collects or maintains personal information from or about the users of or visitors to such Web site or online service, or on whose behalf such information is collected or maintained, or offers products or services for sale through that Web site or online service, where such Web site or online service is operated for commercial purposes involving commerce among the several States or with 1 or more foreign nations; in any territory of the United States or in the District of Columbia, or between any such territory and another such territory or any State or foreign nation; or between the District of Columbia and any State, territory, or foreign nation. This definition does not include any nonprofit entity that would otherwise be exempt from coverage under Section 5 of the Federal Trade Commission Act (15 U.S.C. 45). Personal information is collected or maintained on behalf of an operator when:

(1) It is collected or maintained by anagent or service provider of the operator; or

(2) The operator benefits by allowinganother person to collect personal information directly from users of such Web site or online service.

Parent includes a legal guardian. Person means any individual,

partnership, corporation, trust, estate, cooperative, association, or other entity.

Personal information means individually identifiable information about an individual collected online, including:

(1) A first and last name;(2) A home or other physical address

including street name and name of a city or town;

(3) Online contact information asdefined in this section;

(4) A screen or user name where itfunctions in the same manner as online contact information, as defined in this section;

(5) A telephone number;(6) A Social Security number;(7) A persistent identifier that can be

used to recognize a user over time and across different Web sites or online services. Such persistent identifier includes, but is not limited to, a customer number held in a cookie, an Internet Protocol (IP) address, a processor or device serial number, or unique device identifier;

(8) A photograph, video, or audio filewhere such file contains a child’s image or voice;

(9) Geolocation information sufficientto identify street name and name of a city or town; or

(10) Information concerning the childor the parents of that child that the operator collects online from the child and combines with an identifier described in this definition.

Release of personal information means the sharing, selling, renting, or transfer of personal information to any third party.

Support for the internal operations of the Web site or online service means:

(1) Those activities necessary to:(i) Maintain or analyze the

functioning of the Web site or online service;

(ii) Perform network communications;(iii) Authenticate users of, or

personalize the content on, the Web site or online service;

(iv) Serve contextual advertising onthe Web site or online service or cap the frequency of advertising;

(v) Protect the security or integrity ofthe user, Web site, or online service;

(vi) Ensure legal or regulatorycompliance; or

(vii) Fulfill a request of a child aspermitted by § 312.5(c)(3) and (4);

(2) So long as The informationcollected for the activities listed in paragraphs (1)(i)–(vii) of this definition is not used or disclosed to contact a specific individual, including through behavioral advertising, to amass a

Appendix A



profile on a specific individual, or for any other purpose.

Third party means any person who is not:

(1) An operator with respect to thecollection or maintenance of personal information on the Web site or online service; or

(2) A person who provides support forthe internal operations of the Web site or online service and who does not use or disclose information protected under this part for any other purpose.

Web site or online service directed to children means a commercial Web site or online service, or portion thereof, that is targeted to children.

(1) In determining whether a Web siteor online service, or a portion thereof, is directed to children, the Commission will consider its subject matter, visual content, use of animated characters or child-oriented activities and incentives, music or other audio content, age of models, presence of child celebrities or celebrities who appeal to children, language or other characteristics of the Web site or online service, as well as whether advertising promoting or appearing on the Web site or online service is directed to children. The Commission will also consider competent and reliable empirical evidence regarding audience composition, and evidence regarding the intended audience.

(2) A Web site or online service shallbe deemed directed to children when it has actual knowledge that it is collecting personal information directly from users of another Web site or online service directed to children.

(3) A Web site or online service thatis directed to children under the criteria set forth in paragraph (1) of this definition, but that does not target children as its primary audience, shall not be deemed directed to children if it:

(i) Does not collect personalinformation from any visitor prior to collecting age information; and

(ii) Prevents the collection, use, ordisclosure of personal information from visitors who identify themselves as under age 13 without first complying with the notice and parental consent provisions of this part.

(4) A Web site or online service shallnot be deemed directed to children solely because it refers or links to a commercial Web site or online service directed to children by using information location tools, including a directory, index, reference, pointer, or hypertext link.

§ 312.3 Regulation of unfair or deceptiveacts or practices in connection with thecollection, use, and/or disclosure ofpersonal information from and aboutchildren on the Internet.

General requirements. It shall be unlawful for any operator of a Web site or online service directed to children, or any operator that has actual knowledge that it is collecting or maintaining personal information from a child, to collect personal information from a child in a manner that violates the regulations prescribed under this part. Generally, under this part, an operator must:

(a) Provide notice on the Web site oronline service of what information it collects from children, how it uses such information, and its disclosure practices for such information (§ 312.4(b));

(b) Obtain verifiable parental consentprior to any collection, use, and/or disclosure of personal information from children (§ 312.5);

(c) Provide a reasonable means for aparent to review the personal information collected from a child and to refuse to permit its further use or maintenance (§ 312.6);

(d) Not condition a child’sparticipation in a game, the offering of a prize, or another activity on the child disclosing more personal information than is reasonably necessary to participate in such activity (§ 312.7); and

(e) Establish and maintain reasonableprocedures to protect the confidentiality, security, and integrity of personal information collected from children (§ 312.8).

§ 312.4 Notice.(a) General principles of notice. It

shall be the obligation of the operator to provide notice and obtain verifiable parental consent prior to collecting, using, or disclosing personal information from children. Such notice must be clearly and understandably written, complete, and must contain no unrelated, confusing, or contradictory materials.

(b) Direct notice to the parent. Anoperator must make reasonable efforts, taking into account available technology, to ensure that a parent of a child receives direct notice of the operator’s practices with regard to the collection, use, or disclosure of personal information from children, including notice of any material change in the collection, use, or disclosure practices to which the parent has previously consented.

(c) Content of the direct notice to theparent—(1) Content of the direct notice to the parent under § 312.5(c)(1) (Notice

to Obtain Parent’s Affirmative Consent to the Collection, Use, or Disclosure of a Child’s Personal Information). This direct notice shall set forth:

(i) That the operator has collected theparent’s online contact information from the child, and, if such is the case, the name of the child or the parent, in order to obtain the parent’s consent;

(ii) That the parent’s consent isrequired for the collection, use, or disclosure of such information, and that the operator will not collect, use, or disclose any personal information from the child if the parent does not provide such consent;

(iii) The additional items of personalinformation the operator intends to collect from the child, or the potential opportunities for the disclosure of personal information, should the parent provide consent;

(iv) A hyperlink to the operator’sonline notice of its information practices required under paragraph (d) of this section;

(v) The means by which the parentcan provide verifiable consent to the collection, use, and disclosure of the information; and

(vi) That if the parent does notprovide consent within a reasonable time from the date the direct notice was sent, the operator will delete the parent’s online contact information from its records.

(2) Content of the direct notice to theparent under § 312.5(c)(2) (Voluntary Notice to Parent of a Child’s Online Activities Not Involving the Collection, Use or Disclosure of Personal Information). Where an operator chooses to notify a parent of a child’s participation in a Web site or online service, and where such site or service does not collect any personal information other than the parent’s online contact information, the direct notice shall set forth:

(i) That the operator has collected theparent’s online contact information from the child in order to provide notice to, and subsequently update the parent about, a child’s participation in a Web site or online service that does not otherwise collect, use, or disclose children’s personal information;

(ii) That the parent’s online contactinformation will not be used or disclosed for any other purpose;

(iii) That the parent may refuse topermit the child’s participation in the Web site or online service and may require the deletion of the parent’s online contact information, and how the parent can do so; and

(iv) A hyperlink to the operator’sonline notice of its information

Appendix A



practices required under paragraph (d) of this section.

(3) Content of the direct notice to theparent under § 312.5(c)(4) (Notice to a Parent of Operator’s Intent to Communicate with the Child Multiple Times). This direct notice shall set forth:

(i) That the operator has collected thechild’s online contact information from the child in order to provide multiple online communications to the child;

(ii) That the operator has collected theparent’s online contact information from the child in order to notify the parent that the child has registered to receive multiple online communications from the operator;

(iii) That the online contactinformation collected from the child will not be used for any other purpose, disclosed, or combined with any other information collected from the child;

(iv) That the parent may refuse topermit further contact with the child and require the deletion of the parent’s and child’s online contact information, and how the parent can do so;

(v) That if the parent fails to respondto this direct notice, the operator may use the online contact information collected from the child for the purpose stated in the direct notice; and

(vi) A hyperlink to the operator’sonline notice of its information practices required under paragraph (d) of this section.

(4) Content of the direct notice to theparent required under § 312.5(c)(5) (Notice to a Parent In Order to Protect a Child’s Safety). This direct notice shall set forth:

(i) That the operator has collected thename and the online contact information of the child and the parent in order to protect the safety of a child;

(ii) That the information will not beused or disclosed for any purpose unrelated to the child’s safety;

(iii) That the parent may refuse topermit the use, and require the deletion, of the information collected, and how the parent can do so;

(iv) That if the parent fails to respondto this direct notice, the operator may use the information for the purpose stated in the direct notice; and

(v) A hyperlink to the operator’sonline notice of its information practices required under paragraph (d) of this section.

(d) Notice on the Web site or onlineservice. In addition to the direct notice to the parent, an operator must post a prominent and clearly labeled link to an online notice of its information practices with regard to children on the home or landing page or screen of its Web site or online service, and, at each area of the Web site or online service

where personal information is collected from children. The link must be in close proximity to the requests for information in each such area. An operator of a general audience Web site or online service that has a separate children’s area must post a link to a notice of its information practices with regard to children on the home or landing page or screen of the children’s area. To be complete, the online notice of the Web site or online service’s information practices must state the following:

(1) The name, address, telephonenumber, and email address of all operators collecting or maintaining personal information from children through the Web site or online service. Provided that: The operators of a Web site or online service may list the name, address, phone number, and email address of one operator who will respond to all inquiries from parents concerning the operators’ privacy policies and use of children’s information, as long as the names of all the operators collecting or maintaining personal information from children through the Web site or online service are also listed in the notice;

(2) A description of what informationthe operator collects from children, including whether the Web site or online service enables a child to make personal information publicly available; how the operator uses such information; and, the operator’s disclosure practices for such information; and

(3) That the parent can review or havedeleted the child’s personal information, and refuse to permit further collection or use of the child’s information, and state the procedures for doing so.

§ 312.5 Parental consent.(a) General requirements. (1) An

operator is required to obtain verifiable parental consent before any collection, use, or disclosure of personal information from children, including consent to any material change in the collection, use, or disclosure practices to which the parent has previously consented.

(2) An operator must give the parentthe option to consent to the collection and use of the child’s personal information without consenting to disclosure of his or her personal information to third parties.

(b) Methods for verifiable parentalconsent. (1) An operator must make reasonable efforts to obtain verifiable parental consent, taking into consideration available technology. Any method to obtain verifiable parental consent must be reasonably calculated,

in light of available technology, to ensure that the person providing consent is the child’s parent. (2) Existing methods to obtain verifiable parental consent that satisfy the requirements of this paragraph include:

(i) Providing a consent form to besigned by the parent and returned to the operator by postal mail, facsimile, or electronic scan;

(ii) Requiring a parent, in connectionwith a monetary transaction, to use a credit card, debit card, or other online payment system that provides notification of each discrete transaction to the primary account holder;

(iii) Having a parent call a toll-freetelephone number staffed by trained personnel;

(iv) Having a parent connect totrained personnel via video-conference;

(v) Verifying a parent’s identity bychecking a form of government-issued identification against databases of such information, where the parent’s identification is deleted by the operator from its records promptly after such verification is complete; or

(vi) Provided that, an operator thatdoes not ‘‘disclose’’ (as defined by § 312.2) children’s personal information,may use an email coupled withadditional steps to provide assurancesthat the person providing the consent isthe parent. Such additional stepsinclude: Sending a confirmatory emailto the parent following receipt ofconsent, or obtaining a postal address ortelephone number from the parent andconfirming the parent’s consent by letteror telephone call. An operator that usesthis method must provide notice thatthe parent can revoke any consent givenin response to the earlier email.

(3) Safe harbor approval of parentalconsent methods. A safe harbor program approved by the Commission under § 312.11 may approve its memberoperators’ use of a parental consent method not currently enumerated in paragraph (b)(2) of this section where the safe harbor program determines that such parental consent method meets the requirements of paragraph (b)(1) of this section.

(c) Exceptions to prior parentalconsent. Verifiable parental consent is required prior to any collection, use, or disclosure of personal information from a child except as set forth in this paragraph:

(1) Where the sole purpose ofcollecting the name or online contact information of the parent or child is to provide notice and obtain parental consent under § 312.4(c)(1). If the operator has not obtained parental consent after a reasonable time from the date of the information collection, the

Appendix A



operator must delete such information from its records;

(2) Where the purpose of collecting aparent’s online contact information is to provide voluntary notice to, and subsequently update the parent about, the child’s participation in a Web site or online service that does not otherwise collect, use, or disclose children’s personal information. In such cases, the parent’s online contact information may not be used or disclosed for any other purpose. In such cases, the operator must make reasonable efforts, taking into consideration available technology, to ensure that the parent receives notice as described in § 312.4(c)(2);

(3) Where the sole purpose ofcollecting online contact information from a child is to respond directly on a one-time basis to a specific request from the child, and where such information is not used to re-contact the child or for any other purpose, is not disclosed, and is deleted by the operator from its records promptly after responding to the child’s request;

(4) Where the purpose of collecting achild’s and a parent’s online contact information is to respond directly more than once to the child’s specific request, and where such information is not used for any other purpose, disclosed, or combined with any other information collected from the child. In such cases, the operator must make reasonable efforts, taking into consideration available technology, to ensure that the parent receives notice as described in § 312.4(c)(3). An operator will not bedeemed to have made reasonable effortsto ensure that a parent receives noticewhere the notice to the parent wasunable to be delivered;

(5) Where the purpose of collecting achild’s and a parent’s name and online contact information, is to protect the safety of a child, and where such information is not used or disclosed for any purpose unrelated to the child’s safety. In such cases, the operator must make reasonable efforts, taking into consideration available technology, to provide a parent with notice as described in § 312.4(c)(4);

(6) Where the purpose of collecting achild’s name and online contact information is to:

(i) Protect the security or integrity ofits Web site or online service;

(ii) Take precautions against liability;(iii) Respond to judicial process; or(iv) To the extent permitted under

other provisions of law, to provide information to law enforcement agencies or for an investigation on a matter related to public safety; and where such information is not be used for any other purpose;

(7) Where an operator collects apersistent identifier and no other personal information and such identifier is used for the sole purpose of providing support for the internal operations of the Web site or online service. In such case, there also shall be no obligation to provide notice under § 312.4; or

(8) Where an operator covered underparagraph (2) of the definition of Web site or online service directed to children in § 312.2 collects a persistent identifier and no other personal information from a user who affirmatively interacts with the operator and whose previous registration with that operator indicates that such user is not a child. In such case, there also shall be no obligation to provide notice under § 312.4.

§ 312.6 Right of parent to review personalinformation provided by a child.

(a) Upon request of a parent whosechild has provided personal information to a Web site or online service, the operator of that Web site or online service is required to provide to that parent the following:

(1) A description of the specific typesor categories of personal information collected from children by the operator, such as name, address, telephone number, email address, hobbies, and extracurricular activities;

(2) The opportunity at any time torefuse to permit the operator’s further use or future online collection of personal information from that child, and to direct the operator to delete the child’s personal information; and

(3) Notwithstanding any otherprovision of law, a means of reviewing any personal information collected from the child. The means employed by the operator to carry out this provision must:

(i) Ensure that the requestor is aparent of that child, taking into account available technology; and

(ii) Not be unduly burdensome to theparent.

(b) Neither an operator nor theoperator’s agent shall be held liable under any Federal or State law for any disclosure made in good faith and following reasonable procedures in responding to a request for disclosure of personal information under this section.

(c) Subject to the limitations set forthin § 312.7, an operator may terminate any service provided to a child whose parent has refused, under paragraph (a)(2) of this section, to permit the operator’s further use or collection of personal information from his or her child or has directed the operator to delete the child’s personal information.

§ 312.7 Prohibition against conditioning achild’s participation on collection ofpersonal information.

An operator is prohibited from conditioning a child’s participation in a game, the offering of a prize, or another activity on the child’s disclosing more personal information than is reasonably necessary to participate in such activity.

§ 312.8 Confidentiality, security, andintegrity of personal information collectedfrom children.

The operator must establish and maintain reasonable procedures to protect the confidentiality, security, and integrity of personal information collected from children. The operator must also take reasonable steps to release children’s personal information only to service providers and third parties who are capable of maintaining the confidentiality, security and integrity of such information, and who provide assurances that they will maintain the information in such a manner.

§ 312.9 Enforcement.Subject to sections 6503 and 6505 of

the Children’s Online Privacy Protection Act of 1998, a violation of a regulation prescribed under section 6502 (a) of this Act shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section 18(a)(1)(B) of the Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).

§ 312.10 Data retention and deletionrequirements.

An operator of a Web site or online service shall retain personal information collected online from a child for only as long as is reasonably necessary to fulfill the purpose for which the information was collected. The operator must delete such information using reasonable measures to protect against unauthorized access to, or use of, the information in connection with its deletion.

§ 312.11 Safe harbor programs.(a) In general. Industry groups or

other persons may apply to the Commission for approval of self- regulatory program guidelines (‘‘safe harbor programs’’). The application shall be filed with the Commission’s Office of the Secretary. The Commission will publish in the Federal Register a document seeking public comment on the application. The Commission shall issue a written determination within 180 days of the filing of the application.

(b) Criteria for approval of self- regulatory program guidelines. Proposed safe harbor programs must demonstrate

Appendix A



that they meet the following performance standards:

(1) Program requirements that ensureoperators subject to the self-regulatory program guidelines (‘‘subject operators’’) provide substantially the same or greater protections for children as those contained in §§ 312.2 through 312.8, and 312.10.

(2) An effective, mandatorymechanism for the independent assessment of subject operators’ compliance with the self-regulatory program guidelines. At a minimum, this mechanism must include a comprehensive review by the safe harbor program, to be conducted not less than annually, of each subject operator’s information policies, practices, and representations. The assessment mechanism required under this paragraph can be provided by an independent enforcement program, such as a seal program.

(3) Disciplinary actions for subjectoperators’ non-compliance with self- regulatory program guidelines. This performance standard may be satisfied by:

(i) Mandatory, public reporting of anyaction taken against subject operators by the industry group issuing the self- regulatory guidelines;

(ii) Consumer redress;(iii) Voluntary payments to the United

States Treasury in connection with an industry-directed program for violators of the self-regulatory guidelines;

(iv) Referral to the Commission ofoperators who engage in a pattern or practice of violating the self-regulatory guidelines; or

(v) Any other equally effective action.(c) Request for Commission approval

of self-regulatory program guidelines. A proposed safe harbor program’s request for approval shall be accompanied by the following:

(1) A detailed explanation of theapplicant’s business model, and the technological capabilities and mechanisms that will be used for initial and continuing assessment of subject operators’ fitness for membership in the safe harbor program;

(2) A copy of the full text of theguidelines for which approval is sought and any accompanying commentary;

(3) A comparison of each provision of§§ 312.2 through 312.8, and 312.10 withthe corresponding provisions of theguidelines; and

(4) A statement explaining:(i) How the self-regulatory program

guidelines, including the applicable assessment mechanisms, meet the requirements of this part; and

(ii) How the assessment mechanismsand compliance consequences required

under paragraphs (b)(2) and (b)(3) provide effective enforcement of the requirements of this part.

(d) Reporting and recordkeepingrequirements. Approved safe harbor programs shall:

(1) By July 1, 2014, and annuallythereafter, submit a report to the Commission containing, at a minimum, an aggregated summary of the results of the independent assessments conducted under paragraph (b)(2) of this section, a description of any disciplinary action taken against any subject operator under paragraph (b)(3) of this section, and a description of any approvals of member operators’ use of a parental consent mechanism, pursuant to § 312.5(b)(4);

(2) Promptly respond to Commissionrequests for additional information; and

(3) Maintain for a period not less thanthree years, and upon request make available to the Commission for inspection and copying:

(i) Consumer complaints allegingviolations of the guidelines by subject operators;

(ii) Records of disciplinary actionstaken against subject operators; and

(iii) Results of the independentassessments of subject operators’ compliance required under paragraph (b)(2) of this section.

(e) Post-approval modifications toself-regulatory program guidelines. Approved safe harbor programs must submit proposed changes to their guidelines for review and approval by the Commission in the manner required for initial approval of guidelines under paragraph (c)(2) of this section. The statement required under paragraph (c)(4) of this section must describe how the proposed changes affect existing provisions of the guidelines.

(f) Revocation of approval of self- regulatory program guidelines. The Commission reserves the right to revoke any approval granted under this section if at any time it determines that the approved self-regulatory program guidelines or their implementation do not meet the requirements of this part. Safe harbor programs that were approved prior to the publication of the Final Rule amendments must, by March 1, 2013, submit proposed modifications to their guidelines that would bring them into compliance with such amendments, or their approval shall be revoked.

(g) Operators’ participation in a safeharbor program. An operator will be deemed to be in compliance with the requirements of §§ 312.2 through 312.8, and 312.10 if that operator complies with Commission-approved safe harbor program guidelines. In considering whether to initiate an investigation or

bring an enforcement action against a subject operator for violations of this part, the Commission will take into account the history of the subject operator’s participation in the safe harbor program, whether the subject operator has taken action to remedy such non-compliance, and whether the operator’s non-compliance resulted in any one of the disciplinary actions set forth in paragraph (b)(3).

§ 312.12 Voluntary Commission ApprovalProcesses.

(a) Parental consent methods. Aninterested party may file a written request for Commission approval of parental consent methods not currently enumerated in § 312.5(b). To be considered for approval, a party must provide a detailed description of the proposed parental consent methods, together with an analysis of how the methods meet § 312.5(b)(1). The request shall be filed with the Commission’s Office of the Secretary. The Commission will publish in the Federal Register a document seeking public comment on the request. The Commission shall issue a written determination within 120 days of the filing of the request; and

(b) Support for internal operations ofthe Web site or online service. An interested party may file a written request for Commission approval of additional activities to be included within the definition of support for internal operations. To be considered for approval, a party must provide a detailed justification why such activities should be deemed support for internal operations, and an analysis of their potential effects on children’s online privacy. The request shall be filed with the Commission’s Office of the Secretary. The Commission will publish in the Federal Register a document seeking public comment on the request. The Commission shall issue a written determination within 120 days of the filing of the request.

§ 312.13 Severability.

The provisions of this part areseparate and severable from one another. If any provision is stayed or determined to be invalid, it is the Commission’s intention that the remaining provisions shall continue in effect.

Appendix A



401 15 U.S.C. 6501–6506. 402 COPPA, 15 U.S.C. 6501(2), defines the term

‘‘operator’’ as ‘‘any person who operates a Web site located on the Internet or an online service and who collects or maintains personal information from or about users of or visitors to such Web site or online service, or on whose behalf such information is collected and maintained * * *’’ As stated in the Statement of Basis and Purpose for the original COPPA Rule, ‘‘The definition of ‘operator’ is of central importance because it determines who is covered by the Act and the Rule.’’ Children’s Online Privacy Protection Rule 64 FR 59888, 59891 (Nov. 3, 1999) (final rule).

403 15 U.S.C. 6502(a)(1). 404 If the third-party plugs-ins are child-directed

or have actual knowledge that they are collecting children’s personal information they are already expressly covered by the COPPA statute. Thus, as the SBP notes, a behavioral advertising network that targets children under the age of 13 is already deemed an operator. The amendment must therefore be aimed at reaching third-party plug-ins that are either not child-directed or do not have actual knowledge that they are collecting children’s personal information, which raises a question about what harm this amendment will address. For example, it appears that this same type of harm could occur through general audience Web sites and online services collecting and using visitors’ personal information without knowing whether some of the data is children’s personal information, which is a practice that COPPA and the amendments do not prohibit.

405 16 CFR 312.2 (Definitions).

406 This expanded definition of operator reverses the Commission’s previous conclusion that the appropriate test for determining an entity’s status as an operator is to ‘‘look at the entity’s relationship to the data collected,’’ using factors such as ‘‘who owns and/or controls the information, who pays for its collection and maintenance, the pre-existing contractual relationships regarding collection and maintenance of the information, and the role of the Web site or online service in collecting and/or maintaining the information (i.e., whether the site participates in collection or is merely a conduit through which the information flows to another entity.)’’ Children’s Online Privacy Protection Rule 64 FR 59888, 59893, 59891 (Nov. 3, 1999) (final rule).

407 Chevron v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984) (‘‘When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.’’).

By direction of the Commission, Commissioner Rosch abstaining, and Commissioner Ohlhausen dissenting. Donald S. Clark, Secretary.

Dissenting Statement of Commissioner Maureen K. Ohlhausen

I voted against adopting the amendments to the Children’s Online Privacy Protection Act (COPPA) Rule because I believe a core provision of the amendments exceeds the scope of the authority granted us by Congress in COPPA, the statute that underlies and authorizes the Rule.401 Before I explain my concerns, I wish to commend the Commission staff for their careful consideration of the multitude of issues raised by the numerous comments in this proceeding. Much of the language of the amendments is designed to preserve flexibility for the industry while striving to protect children’s privacy, a goal I support strongly. The final proposed amendments largely strike the right balance between protecting children’s privacy online and avoiding undue burdens on providers of children’s online content and services. The staff’s great expertise in the area of children’s privacy and deep understanding of the values at stake in this matter have been invaluable in my consideration of these important issues.

In COPPA Congress defined who is an operator and thereby set the outer boundary for the statute’s and the COPPA Rule’s reach.402 It is undisputed that COPPA places obligations on operators of Web sites or online services directed to children or operators with actual knowledge that they are collecting personal information from

children. The statute provides, ‘‘It is unlawful for an operator of a Web site or online service directed to children, or any operator that has actual knowledge that it is collecting personal information from a child, to collect personal information from a child in a manner that violates the regulations prescribed [by the FTC].’’ 403

The Statement of Basis and Purpose for the amendments (SBP) discusses concerns that the current COPPA Rule may not cover child- directed Web sites or services that do not themselves collect children’s personal information but may incorporate third-party plug-ins that collect such information 404 for the plug-ins’ use but do not collect or maintain the information for, or share it with, the child-directed site or service. To address these concerns, the amendments add a new proviso to the definition of operator in the COPPA Rule: ‘‘Personal information is collected or maintained on behalf of an operator when: (a) it is collected or maintained by an agent or service provider of the operator; or (b) the operator benefits by allowing another person to collect personal information directly from users of such Web site or online service.’’ 405

The proposed amendments construe the term ‘‘on whose behalf such information is collected and maintained’’ to reach child- directed Web sites or services that merely derive from a third-party plug-in some kind of benefit, which may well be unrelated to the collection and use of children’s

information (e.g., content, functionality, or advertising revenue). I find that this proviso—which would extend COPPA obligations to entities that do not collect personal information from children or have access to or control of such information collected by a third-party does not comport with the plain meaning of the statutory definition of an operator in COPPA, which covers only entities ‘‘on whose behalf such information is collected and maintained.’’ 406 In other words, I do not believe that the fact that a child-directed site or online service receives any kind of benefit from using a plug-in is equivalent to the collection of personal information by the third-party plug- in on behalf of the child-directed site or online service.

As the Supreme Court has directed, an agency ‘‘must give effect to the unambiguously expressed intent of Congress.’’ 407 Thus, regardless of the policy justifications offered, I cannot support expanding the definition of the term ‘‘operator’’ beyond the statutory parameters set by Congress in COPPA.

I therefore respectfully dissent.

[FR Doc. 2012–31341 Filed 1–16–13; 8:45 am]

BILLING CODE 6750–01–P

Appendix A


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